19 August 2014

G00270023

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Summary

Saleslogix will plug a hole in Infor's cloud application strategy. The deal will renew opportunities for an underperforming product and increase options for IT leaders supporting sales and sales operations managers.

Table of Contents

News Analysis

Event

On 14 August 2014, Infor announced that it has entered into an agreement to acquire all of the Saleslogix CRM assets from Swiftpage
.
Infor did not disclose financial terms of the deal, but said it will close within the next few weeks. Infor will rebrand the Saleslogix solution as Infor CRM and add it to the Infor CloudSuite cloud applications, which are hosted on Amazon Web Services (AWS), Infor's cloud delivery platform.

Analysis

The Saleslogix assets will help Infor expand its cloud business application offerings to support sales force automation (SFA) for small and midsize businesses (SMBs). The most likely beneficiaries of the deal are Infor SMB customers that have not already engaged other vendors to provide these functions. However, Infor's frequently shifting CRM strategy has led many of its customers to look elsewhere or work with a mix of CRM capabilities.

Although Saleslogix is a functionally complete core SFA offering in areas such as contact and opportunity management and sales forecasting, Gartner has found that some Saleslogix customers that have not upgraded in several release cycles are moving to competitors. Swiftpage stated that retention rates for Saleslogix customers paying maintenance reached 93.4% in 2013. We attribute the relatively limited market performance of Saleslogix to several factors:

Sage Software, which owned Saleslogix before Swiftpage, marketed it alongside two other CRM offerings, Act! and SageCRM, to the same or similar markets. Customers were often confused about the differences among the three products, similar to the confusion that Infor customers have expressed about Infor's competing offerings.

Saleslogix was primarily an on-premises product. To support the cloud, Sage Software provided the option to run Saleslogix on Amazon AWS. Uptake was initially muted, but Infor states Saleslogix now has 183 customers using Saleslogix on AWS. Based on Infor's strategy for other business applications, we believe it will focus its efforts on the AWS delivery model; however, Infor says it will continue to sell Saleslogix on premises through its reseller channel.

Infor has not yet announced specific plans for integrating Saleslogix with other Infor products, but its integration platform, Intelligent Open Network (ION), is likely to serve as its base. We believe that Infor will primarily target ERP systems aimed at SMBs for integration, as organizations using systems from LN or M3 will be less interested in Saleslogix capabilities. We also believe that Infor CRM will lessen the importance of Infor's reseller arrangement with salesforce.com. Infor states it will target Saleslogix at the lower end of Infor's customer base, but Saleslogix has been used for 500- to 700-user deployments, making limits less clear. Infor states it will continue to resell salesforce.com, but did not provide exact metrics for its target customer segment.

Recommendations

IT leaders supporting sales and sales operations managers:

If you are a Saleslogix on-premises customer, prepare for Infor's commitment to the on-premises version of Infor CRM to lessen over time, and secure commitments related to support for these products, as well as any potential incentives to migrate to AWS.

If you are a Saleslogix AWS customer, review your contracts, assess renewal costs and ensure that Infor is obligated to maintain your current terms and conditions.

If you are an Infor ERP customer, evaluate Infor CRM as a potential alternative for SFA solutions. Expect Infor to offer incentives to switch from current SFA-related solutions.

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